The financial year may be spread over any period of 12 months. There is no need to obtain prior authorisation in order to close the financial year on a date other than 31 December or 30 June.
CIT returns are due before 15 May each year for companies whose financial year ends at 31 December, before 15 November each year for companies whose financial year ends at 30 June, and no later than the 15th day of the fourth month from the date of closing of the financial year for all other year-ends.
Taxpayers having annual revenue of more than MGA 200 millions must file annual financial statements online.
Payment of tax
CIT is payable bimonthly in provisional instalments. The balance is payable before 15 May each year for companies whose financial year ends at 31 December, before 15 November each year for companies whose financial year ends at 30 June, and within four months from the date of closing of the financial year for all other year-ends.
Taxpayers can decide to suspend the payment of bimonthly income tax instalments, but they must pay a penalty of 80% if the final tax due is more than the previous year's income tax.
WHT on foreign services is payable to the tax authorities within one month of the date of payment.
WHT on purchase of goods and services from non registered suppliers is payable to the tax authorities before 15 of the month following the payment.
WHT on interest and on payments to members of boards of directors is payable to the tax authority before 15 of the month following the payment.
WHT on dividends is payable to the tax authority before 15 of the month following the payment.
Tax audit process
The tax authority carries out audits of a selection of tax returns, usually at the taxpayer’s place of business. Audits may be carried out at any time prior to the expiration of the statute of limitations.
During tax audit, tax authorities can access all the taxpayer data available on servers, terminals, and any supporting systems.
After examination of available information, the tax authority issues a primary notice, and the taxpayer has 30 days after the date of reception of the primary notice to answer and submit its written objection to the tax authority.
The tax authority then issues the final notification accompanied with the perception title.
The taxpayer may request or not the opinion of the Tax Commission (CoFi):
- If taxpayer requests CoFi’s opinion:
The taxpayer has 15 days from the notice of the final notification accompanied with the perception title to file the request. After obtaining the CoFi’s opinion, the tax authority issues the final decision within 60 days.
30 days from the final decision, the taxpayer can file a claim to the Tax Administration.
- If tax payer does not request CoFi’s opinion:
The taxpayer has 30 days from the notice of the final notification accompanied with the perception title to file a claim to the Tax Administration.
The Tax Administration has 60 days to issue its decision. The decision of that body may be further appealed to the Court (State Council) within 60 days.
Statute of limitations
The tax limitation period is three years. However, by way of derogation the 2017 financial year remains non-prescribed in 2021.
Topics of focus for tax authorities
Areas where tax authorities usually claim adjustment are:
- VAT reverse on foreign services.
- Completeness of VAT output on revenue.
- Sales without invoices.
- Expenses without invoices.
- Employees' remuneration not subject to salary tax.
- Payment to non-registered suppliers.